26 U.S. Code § 3321 - Imposition of tax

There is hereby imposed on every rail employer for each calendar month an excise tax, with respect to having individuals in his employ, equal to 4 percent of the total rail wages paid by him during such month.

(b) Tax on employee representatives

(1) In general

There is hereby imposed on the income of each employee representative a tax equal to 4 percent of the rail wages paid to him during the calendar month.

(2) Determination of wages

The rail wages of an employee representative for purposes of paragraph (1) shall be determined in the same manner and with the same effect as if the employee organization by which such employee representative is employed were a rail employer.

(c) Termination if loans to railroad unemployment fund repaid

The tax imposed by this section shall not apply to rail wages paid on or after the 1st day of any calendar month if, as of such 1st day, there is—

(1)no balance of transfers made before October 1, 1985, to the railroad unemployment insurance account under section 10(d) of the Railroad Unemployment Insurance Act, and

Section 10(d) of the Railroad Unemployment Insurance Act, referred to in subsec. (c)(1), is classified to section
360(d) of Title
45, Railroads.

Amendments

1988—Pub. L. 100–647, § 7106(a), amended section generally, revising and restating provisions of subsecs. (a) and (b) and specifying imposition of 4 percent tax on rail wages rather than a tax based on the “applicable percentage” of rail wages, and in subsec. (c) substituting provisions relating to termination if loans to railroad unemployment fund repaid for provisions relating to rates of tax.

“(1) For taxable period july 1 through december 31, 1986.—The applicable percentage for the taxable period beginning on July 1, 1986, and ending on December 31, 1986, shall be 2 percent.

“(2) Subsequent taxable periods.—The applicable percentage for any taxable period beginning after 1986 shall be the sum of—

“(A) 2 percent, plus

“(B) 0.3 percent for each preceding taxable period.

In no event shall the applicable percentage exceed 5 percent.”

Effective Date of 1988 Amendment

Amendment by section 1018(u)(17) ofPub. L. 100–647effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) ofPub. L. 100–647, set out as a note under section
1 of this title.

Pub. L. 100–647, title VII, § 7106(d),Nov. 10, 1988, 102 Stat. 3774, provided that: “The amendments made by this section [amending this section and sections
3322,
6157,
6201,
6317,
6513, and
6601 of this title, omitting section
3323 of this title, and amending provisions set out as a note under section
231n of Title
45, Railroads], and the provisions of subsection (b) [set out below], shall apply to remuneration paid after December 31, 1988.”

“(A) 3.5 percent for each month during a calendar year if, as of September 30, of the preceding calendar year, there was a balance of transfers (or unpaid interest thereon) made after September 30, 1985, to the railroad unemployment insurance account under section 10(d) of the Railroad Unemployment Insurance Act [45 U.S.C. 360(d)], and

“(B) zero for any other calendar month.”

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